SEC charges China-based Puda Coal executives with fraud

WASHINGTON (Reuters) - U.S. securities regulators on Wednesday charged two China-based Puda Coal executives with fraud, saying they led investors to invest in an empty shell company instead of an actual coal business.

The Securities and Exchange Commission's civil suit, filed in a Manhattan federal court, alleges the company's Chairman Ming Zhao and former CEO Liping Zhu tried to "steal and sell" Puda Coal's coal mining company Shanxi Puda Coal Group, the company's only source of revenue.

The complaint claims that Zhao transferred a controlling interest to himself, and then sold a substantial portion to a fund.

This marks the latest case by the SEC in its ongoing probe into accounting irregularities at Chinese-based companies that list on U.S. exchanges. Puda Coal was previously listed on NYSE Amex, which is owned by NYSE Euronext. The company was delisted last year.

It gained access to the American capital markets through a backdoor process known as a reverse merger.

The SEC said there is no known defense counsel as of this time.

(Reporting By Sarah N. Lynch and Aruna Viswanatha)

(This story is corrected to clarify that Puda Coal was listed on NYSE Amex, an exchange owned by parent company NYSE Euronext, not the New York Stock Exchange)